World buyers getting eagerly in line for U.S. natural gas

posted at 7:01 pm on January 25, 2014 by Erika Johnsen

In the usual self-defeating attitude of anti-free traders who prefer the selective protectionism that benefits a few rather than the openness and freedom that benefit everyone, certain groups and politicians with manufacturing, chemical, and other miscellaneous special interests to answer to are still trying to argue that any possibility of upward pressure on the price of natural gas would have horrendous consequences across the economic spectrum. Allowing for increased exports of the stuff should therefore be avoided at all costs, they insist — while completely ignoring the fact that the entire U.S. economy and would be the beneficiary of said higher prices. The wider competition of a larger global market would be a boon for the U.S. energy sector and all of the jobs and wealth that it creates — and the rest of the world is ready and waiting for the U.S. to get the free-trade party started. Via Reuters:

Countries across the world have been quietly signing deals in recent months to import natural gas from the United States, revealing a growing appetite for the fuel overseas as domestic output soars.

Up to a dozen long-term deals, each worth billions of dollars, have been penned behind closed doors with companies in China, Japan, Taiwan, Spain, France and Chile as global demand spikes, according to company, industry and trade sources. …

The unannounced deals, which amount to about 2 percent of daily U.S. supply, are not the first of their kind, and they depend on U.S. government approval to construct two new liquefied natural gas (LNG) plants. …

Companies like Britain’s BP (BP.L) and France’s GDF Suez (GSZ.PA), already committed to taking LNG from the United States, are now finding multiple buyers willing to take tranches of supply. …

The United States is currently producing about 70 billion cub feet of gas every day, and all of these deals put together still only amount to around 1.5 billion cub feet a day in would-be exports. There’s plenty of the stuff to go around, yet we only have four natural gas export facilities in operation with a score of other just waiting for the Obama administration to make up its mind. Get on it.


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Bmore on January 25, 2014 at 7:09 PM

But it’s all right now, in fact, it’s a gas!

Electrongod on January 25, 2014 at 7:15 PM

Electrongod on January 25, 2014 at 7:15 PM

Nice Stones reference. Would it have killed you to link it? ; )

Bmore on January 25, 2014 at 7:25 PM

If it’s good for the US economy, you know King Barack the Magnificent will oppose it.

GarandFan on January 25, 2014 at 7:32 PM

Nice Stones reference. Would it have killed you to link it? ; )

Bmore on January 25, 2014 at 7:25 PM

:)…….:)

Electrongod on January 25, 2014 at 7:34 PM

Finally. LNG has been an ace up America’s sleeve for a long time.

Christien on January 25, 2014 at 7:35 PM

Obama to take credit for being the Gas God in the State of Confusion…address…

Electrongod on January 25, 2014 at 7:37 PM

Anyone see Lourdes today?

OmahaConservative on January 25, 2014 at 7:43 PM

If only 2% is being exported, why did my price just jump 25% with a warning of higher prices to come?

DarrelsJoy on January 25, 2014 at 7:45 PM

But it’s all right now, in fact, it’s a gas!

Electrongod on January 25, 2014 at 7:15 PM

I’m Jumpin’ Jack Flash.

Steve Eggleston on January 25, 2014 at 7:48 PM

Anyone see Lourdes today?

OmahaConservative on January 25, 2014 at 7:43 PM

…be nice!

KOOLAID2 on January 25, 2014 at 7:48 PM

…be nice!

KOOLAID2 on January 25, 2014 at 7:48 PM

I am actually concerned for her…

OmahaConservative on January 25, 2014 at 7:50 PM

just waiting for the Obama administration to make up change its mind

FIFY

Knott Buyinit on January 25, 2014 at 7:54 PM

Well, countries that are able to export a lot of energy tend to become more powerful and influential, don’t they? And we wouldn’t want that for our country, would we?

J.S.K. on January 25, 2014 at 8:16 PM

MeanWhile,….in CanuckLand,…Projects Galore”

LNG in BC
Liquefied Natural Gas
*********************

Projects
**********

Prince Rupert LNG – (BG Group and Spectra Energy Natural Gas Transportation System)
Pacific Northwest LNG (PETRONAS & Progress)
Kitimat LNG (Apache Canada Ltd. & Chevron Canada)
LNG Canada – (Shell Canada Ltd., PetroChina Company Limited, Korea Gas Corp, Mitsubishi Corporation (KOGAS))
Douglas Channel Energy Project – (BC LNG Export Co-operative LLC: LNG Partners (Texas) and Haisla Nation)

With a capacity of transporting 4.2 billion cubic feet per day (Bcf/d) of natural gas the transportation system will meet the demands of BC’s West Coast LNG terminal and maintain the vision of the BC’s Jobs Plan goal of establishing LNG facilities by 2020.

With an in service date of late 2018/early 2019 Lelu Island’s LNG export facility’s capital would be $9-11 billion. The employment benefits would range from up to 3,500 construction jobs and 200 to 300 direct jobs to operate the facility.

Natural gas will be delivered via a pipeline lateral of approximately 14 kilometres from the Pacific Trail Pipelines, which will connect to the existing Spectra Energy Westcoast Pipeline system With the Kitimat LNG facility projected in service dates of 2015 this project will create 5,000 construction jobs over 4 years with 450 operational. The LNG facility is hoping to have five to seven shipments per month once the facility becomes fully operational.

LNG Canada – (Shell Canada Ltd., PetroChina Company Limited, Korea Gas Corp, Mitsubishi Corporation (KOGAS))

Shell Canada Ltd, in partnership with PetroChina Company Limited, Korea Gas Corp, Mitsubishi Corporation (KOGAS) make up LNG Canada who are proposing to build a liquefied natural gas (LNG) export terminal in Kitimat, British Columbia.

http://engage.gov.bc.ca/lnginbc/first-nations-and-communities/

canopfor on January 25, 2014 at 8:19 PM

And, in Wisconsin:

US propane shortage 2014
1h
Wisconsin Gov. Scott Walker declares state of emergency due to propane shortage, cold weather – @gbpressgazette
========================================

https://twitter.com/gbpressgazette

canopfor on January 25, 2014 at 8:20 PM

“Bail-in” As opposed to bail-out.

Bank makes bad loans. People default. Bank takes depositors money,
your money, to pay off the loans. You can only take out a limited amount, with bank approval. The bank will ask you why you need the money.

http://www.shtfplan.com/headline-news/bank-run-fears-customers-being-forced-to-provide-evidence-for-why-they-need-cash_01252014

davidk on January 25, 2014 at 8:21 PM

Where the hell is the qotd thread?

OmahaConservative on January 25, 2014 at 8:25 PM

Where the hell is the qotd thread?

OmahaConservative on January 25, 2014 at 8:25 PM

What did Christie do?

viking01 on January 25, 2014 at 8:49 PM

We can’t be have’n no “free trade” till da gubRmint figures out what their skim is.

roflmmfao

donabernathy on January 25, 2014 at 9:07 PM

If something will improve the economy, count on Barry to oppose it. Can’t have the free market creating jobs and ending government dependency now can we.

Iblis on January 25, 2014 at 10:10 PM

Jaysus Henry Milton KeeeeeeeeeRIST this MO-RON TOTUS could infest a freshly scrubbed and dipped Dawg with terminal fleas (now I realize why pre Algebra drilled us with negative exponents – obviously to describe TOTUS’s mental capabilities)

Bugs says it BEST

Katfish on January 25, 2014 at 10:25 PM

canopfor on January 25, 2014 at 8:19 PM

Just because projects are announced it doesn’t mean that all will go through with them. Those who are first in will get built, then the market will be saturated. Same with here in the U.S. likely half that get permits to build will never turn the first spade of dirt.

Kermit on January 25, 2014 at 11:19 PM

canopfor on January 25, 2014 at 8:20 PM

We have plenty of propane. Pipelines for propane to the north have changed to sending lease condensate up to Canada. The problem is that all those corn farmers need propane to dry the corn before it goes to ethanol.

Emergency measures by governors only lift restrictions so that truck drivers can make overtime without driving for to many hours per day.

Kermit on January 25, 2014 at 11:22 PM

DarrelsJoy on January 25, 2014 at 7:45 PM

Depends what part of the country you live in. New England got hammered hard due the cold snap. It’s natural gas is mostly fed from offshore Canada where fields have declined, when demand goes beyond that the spot market prices per day there go to 20X what they are here in Louisiana.

Kermit on January 25, 2014 at 11:24 PM

Allowing for increased exports of the stuff should therefore be avoided at all costs, they insist — while completely ignoring the fact that the entire U.S. economy and would be the beneficiary of said higher prices. The wider competition of a larger global market would be a boon for the U.S. energy sector and all of the jobs and wealth that it creates — and the rest of the world is ready and waiting for the U.S. to get the free-trade party started.
Try as they might energy is the one area of the economy the regime has not been able to slow down, over tax, or stifle sufficiently. They hate capitalism and would like nothing better than to take over all energy companies.
Let’s hope we take back the Senate and then have the guts to impeach thee impostors.

rodguy911 on January 26, 2014 at 7:15 AM

Depends what part of the country you live in. New England got hammered hard due the cold snap. It’s natural gas is mostly fed from offshore Canada where fields have declined, when demand goes beyond that the spot market prices per day there go to 20X what they are here in Louisiana.

Kermit on January 25, 2014 at 11:24 PM

The funny thing is that I don’t really think this has anything to do with free tread. It the nut job enviro-nazis that are the problem.
Additionally with the recent closure of nuclear, reluctance to build new nuclear and the insane war on coal we are becoming completely dependent on a single fuel source and that is GAS. Any significant disruption to the current low price point will cause major problems that politicians want to avoid. All of the BS about wind and solar are just that.

whbates on January 26, 2014 at 8:00 AM

So much for “energy independence” bull sh~t. First chance the crony capitalists get, they ship America’s oil out. And NO, it’s not that fungible. When war or economic collapse occurs, we wont have the facilities and distribution channels in place to quickly make use of it. This is a national security issue, and it’s being compromised for a little more money if sold abroad. It’s a rape of America.

elfman on January 26, 2014 at 8:25 AM

Driving home last night in the far western section of the Permian Basin oilfield in Texas — the part that barely existed a decade ago — the gas flares were all over the place, because the pipeline infrastructure isn’t in place yet to handle what’s being produced. Those are in the process of getting done, but it is Texas. For the Marcellus Shale gas that would be shipped to Europe, pipelines to feed the LNG port hubs being sought would have to go through mid-Atlantic states, already rife with nutty governors like Martin O’Malley and Terry McAuliffe who will bow to their party’s radical environmentalist wings.

Even if the White House were to give the OK on the LNG plants and port hub, expect the enviros to do a repeat of the Keystone Pipeline actions to block ways for the natural gas to get to those hubs. The hubs along the Gulf Coast will happen quickly, but the ones serving the northeastern gas fields are going to have to wait a long time to begin operation.

jon1979 on January 26, 2014 at 10:08 AM

Exporting while shortages in USA – Stupid

Wade on January 26, 2014 at 12:01 PM

World buyers getting eagerly in line for U.S. natural gas

Sure, and a few thousand American workers will get paid $2000 a week for this and for the oil sands petroleum, the companies will make huge profits, and the American economy will still collapse.

So what?

Dr. ZhivBlago on January 26, 2014 at 1:04 PM

whbates on January 26, 2014 at 8:00 AM

That dependence on NG as electric power source is mostly due to Bill Clinton and his close associate, ENRON.

Kermit on January 26, 2014 at 5:53 PM

jon1979 on January 26, 2014 at 10:08 AM

They cannot do crap on lines within the state. Problem in Permian is not the pipeline infrastructure, but the tiny amounts of gas per well, which appear huge when flared. You ought to see a ethylene cracker flare when a compressor trips to flare off the incoming natural gas fuel for the furnaces. You cannot stand within 100 yards of the base of the flare stack, and a 36″ gas pipeline fueling it. The gas has been bought and paid for and the flare is a safety measure.

Kermit on January 26, 2014 at 5:57 PM

jon1979 on January 26, 2014 at 10:08 AM

There already are rather large pipeline to the Northeast up to NY State, from the Gulf Coast and have been for decades. They all pretty much start in Louisiana from the SW end of the state to below New Orleans. They cover everything from IL to PA and down to FL.

Kermit on January 27, 2014 at 11:00 AM